1
PROMISSORY NOTE
-----------------------------------------------------------------------------------------------------------
PRINCIPAL LOAN DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIAL
$374,940.00 09-12-1997 10-01-2000 599 120 1442922487 43556
-----------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document
to any particular loan or item.
-----------------------------------------------------------------------------------------------------------
BORROWER: ERGOBILT, INC. (TIN: 000000000) LENDER: COMERICA BANK - TEXAS
0000 XXXXXXXXX XXXXX XXXXXXXXX-XXXXXX XXXXXX-XXXXXXXXX
XXXXXX, XX 00000 P.O. BOX 650282
DALLAS, TX 75265-0282
===========================================================================================================
PRINCIPAL AMOUNT: $374,940.00 INITIAL RATE: 9.000% DATE OF NOTE: SEPTEMBER 12, 1997
PROMISE TO PAY. ErgoBilt, Inc. ("Borrower") promises to pay to Comerica Bank -
Texas ("Lender). or order, in lawful money of the United States of America, the
principal amount of Three Hundred Seventy Four Thousand Nine Hundred Forty &
00/100 Dollars ($374,940.00), together with interest on the unpaid principal
balance from September 12, 1997, until maturity.
PAYMENT. Subject to any payment changes resulting from changes in the index,
Borrower will pay this loan on demand, or if no demand is made, in 35 principal
payments of 410,415.00 each and one final principal and interest payment of
$10,493.11. Xxxxxxxx's first principal payment is due November 1, 1997, and all
subsequent principal payments are due on the same day of each month after that.
In addition borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date. Xxxxxxxx's first interest payment due
November 1, 1997 and all subsequent interest payments are due on the same day
of each moth after that. Xxxxxxxx's final payment date, October 1, 2000, will
be for all principal and accrued interest not yet paid. The annual interest
rate for this Note is computed on a 365/360 basis that is, by applying the
ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the
principal balance is outstanding, unless such calculation would result in a
usurious rate, in which case interest shall be calculated on a per diem basis
of a year of 365 or 366 days, as the case may be. Borrower will pay Lender at
Xxxxxx's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will
be applied first to accrued unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is Lender Prime Rate (the
"Index"). this is the rate Lender charges, would charge, on 90-day unsecured
loans to the most creditworthy corporate customer. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current index rate upon Xxxxxxxx's request. Borrower understands
that Lender may make loans based on other rates as well. The interest rate
change will not occur more often than each day. THE INDEX CURRENTLY IS 8.500%
PER ANNUM. THE INTEREST RATE TO BE APPLIED PRIOR TO MATURITY TO THE UNPAID
PRINCIPAL BALANCE OF THE NOTE WILL BE AT A RATE OF 0.500 PERCENTAGE POINTS OVER
THE INDEX, RESULTING IN AN INITIAL RATE OF 9.000% PER ANNUM. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law. For purposes of this Note, the "maximum rate
allowed by applicable law: means the greater of (a) the maximum rate of
interest permitted under federal or other law applicable to the indebtedness
evidenced by this Note, or (b) the "Weekly Rate" as referred to in Section
303.201 of the Texas Finance Code and Articles 1D.002 and 1D.003 of the Texas
Credit title.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Xxxxxx in writing, relieve Xxxxxxxx of Xxxxxxxx's obligation to continue to
make payments under the payment schedule. Rather, they will reduce the
principal balance due and may result in Borrower making fewer payments.
POST MATURITY RATE. The Post Maturity Rate on this Note is the maximum rate
allowed by applicable law. Borrower will pay interest on all sums due after
final maturity, whether by acceleration or otherwise, at that rate, with the
exception of any amounts added to the principal balance of this Note based on
Lender's payment of insurance premiums, which will continue to accrue interest
at the pre-maturity rate.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition contained in this
Note or any agreement related to this Note, or in any other agreement or loan
Borrower has with Lender. (c) Any representation or statement made or furnished
to Lender by Borrower or on borrower's behalf is false or misleading in any
material respect either now or at the time made or furnished. (d) Xxxxxxxx
becomes insolvent, a receiver is appointed for any part of Xxxxxxxx's property,
Xxxxxxxx makes an assignment for the benefit of creditors or any proceeding is
commenced either by Borrower or against Borrower under any bankruptcy or
insolvency laws. (e) Any creditor tries to take any of Xxxxxxxx's property on
or in which Xxxxxx has a lien or security interest. This includes a garnishment
of any of Xxxxxxxx's accounts with Xxxxxx. (f) Any guarantor dies or any of the
other events described in this default section occurs with respect to any
guarantor of this Note. (g) A material adverse change occurs in Borrower's
financial condition, or Xxxxxx believes the prospect of payment or performance
of the indebtedness is impaired. (h) Lender in good xxxxx xxxxx itself
insecure.
If any default, other than a default in payment, is curable, it may be cured
(and no event of default will have occurred) if Borrower, after receiving
written notice from Lender demanding cure of such default: (a) cures the
default within fifteen (15) days; or (b) if the cure requires more than fifteen
(15) days immediately initiate steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance
as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire indebtedness,
including the unpaid principal balance on this Note, all accrued unpaid
interest, and all other amounts, costs and expenses for which Borrower is
responsible under this Note or any other agreement with lender pertaining to
this loan, immediately due, without notice, and then Borrower will pay that
amount. Xxxxxx may hire an attorney to help collect this Note if Borrower does
not pay, and Borrower will pay Xxxxxx's reasonable attorneys' fees. Borrower
also will pay Lender all other amounts actual incurred by Xxxxxx as court
costs, lawful fees for filing, recording, or releasing to any public office any
instrument securing this loan, the reasonable cost actually expended for
repossessing, storing, preparing for sale, and selling any security; and fees
for noting a lien on or transferring a certificate of title to any motor
vehicle offered as security for this loan, or premiums or identifiable charges
received in connection with the sale of authorized insurance. THIS NOTE HAS
BEEN DELIVERED TO LENDER AND ACCEPTED BY LENDER IN THE STATE OF TEXAS. IF THERE
IS A LAWSUIT, AND IF THE TRANSACTION EVIDENCED BY THIS NOTE OCCURRED IN DALLAS
COUNTY, XXXXXXXX AGREES UPON XXXXXX'S REQUEST TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF DALLAS COUNTY, THE STATE OF TEXAS. XXXXXX AND BORROWER HEREBY
WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
BROUGHT BY EITHER XXXXXX OR BORROWER AGAINST THE OTHER. (INITIAL HERE [/s/WBG
C/S]. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, life and interest in and to, Xxxxxxxx's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Xxxxx accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Xxxxxx, to the extent permitted by
applicable, law to charge or setoff all sums owing on this Note against any and
all such accounts.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Xxxxxx's right to
declare payment of this Note on its demand. If any part of this Note cannot be
enforced, this fact will not affect the rest of the Note. In particular, this
section means (among other things) that Borrower does not agree or intend to
pay, and Lender does not agree or intend to contract for, charge, collect,
take, reserve or receive (collectively referred to herein as "charge or
collect"), any amount in the nature of interest or in the nature of a fee for
this loan, which would in any way or event (including demand, prepayment, or
acceleration) cause Lender to charge or collect more for this loan than the
maximum Lender would be permitted to charge or collect by federal law or the
law of the State of Texas (as applicable). Any such excess interest or
unauthorized fee shall, instead of anything stated to the contrary, be applied
first to reduce the principal balance of this loan, and when the principal has
been paid in full, be refunded to Borrower. The right to accelerate maturity of
sums due under this Note does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Lender
does not intend to charge or collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of sums due hereunder shall, to the extent
permitted by applicable law, be amortized, prorate, allocated and spread
throughout the full term of the loan evidence by this Note until payment in
full so that the rate or amount of interest on account of the loan evidenced
hereby does not exceed the applicable usury ceiling. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses this Note, to
the extent allowed by law, waive presentment, demand for payment, protest,
notice of dishonor, notice of intent to accelerate the maturity of this Note,
and notice of acceleration of the maturity of this Note. Upon any change in
the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation make or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon
or perfect Xxxxxx's security interest in the collateral without the consent of
or notice to anyone. All such parties also agree that Xxxxxx may modify this
loan without the consent of or notice to anyone other than the party with whom
the modification is made.
2
09-12-1997 PROMISSORY NOTE
LOAN NO (CONTINUED) PAGE
================================================================================
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. XXXXXXXX AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETE COPY OF THE NOTE.
BORROWER:
ErgoBilt, Inc.
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXXXX XXXXX
--------------------------- ---------------------------
Xxxxxxx X. Xxxxx, Secretary Xxxxxx Xxxxx, President
================================================================================
